Record number of five-year mortgage deals as families look to take advantage of ultra-low rates

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Record number of five-year mortgage deals available as families look to take advantage of ultra-low interest rates

Families are being offered a record number of five-year mortgage deals amid a scramble to take advantage of ultra-low interest rates, a study shows.

Customers can choose from 1,542 different five-year fixed-rate mortgages at building societies and banks, according to data firm Moneyfacts – almost twice as many as were available five years ago.

There are almost as many five-year deals available as two-year ones, which traditionally dominated the market.

Customers currently can choose from 1,542 different five-year fixed-rate mortgages at building societies and banks

Customers currently can choose from 1,542 different five-year fixed-rate mortgages at building societies and banks

This suggests banks are seeking to take advantage of borrowers who want to lock in interest rates that are close to all-time lows. 

Around 74 per cent of mortgage borrowing is now on a fixed rate, data from the Financial Conduct Authority watchdog shows, up from 42 per cent in 2014.

Moneyfacts’ Darren Cook said ‘with the number of five-year fixes increasing significantly over the past five years, it is clear borrowers have an even greater choice of products available in the mortgage markets’.

He added: ‘With average fixed interest rates near historic lows, there is competition among providers to not only grow their mortgage books, but they are fiercely competing to make sure that their mortgage rates appear competitive to retain their existing borrowers.’

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